'To some extent what we saw in the 2007-08 crash was the result of the throwing off of Glass-Steagall," Parsons said, referring to the 1999 repeal of the banking law that separated banks from investment banks and insurers.

Parsons made the remarks last week following a restive annual shareholder meeting of the bank.

The Glass-Steagall excuse has been thoroughly litigated and discredited. It's another red herring to take a confused public off the scent of the real culprit: overregulation of the mortgage industry. Of course, that's the last thing community organizers crashing the annual meetings of regulated banks want to hear.

There's no evidence any bank, including Citibank, got into trouble because of a securities or insurance affiliate. The banks that suffered subprime losses were engaged in activities — namely, mortgage lending — that were always permitted by Glass-Steagall.

And none of them was affiliated at the time with the investment banks that got into trouble — namely, Lehman, Bear Stearns and Merrill Lynch, which overinvested in subprime securities. And they did so after Fannie Mae and Freddie Mac made a huge market for such investments in response to political pressure from HUD to meet affordable housing goals.

Finally, Glass-Steagall deregulation had nothing to do with the gutting of traditional mortgage underwriting standards — the core cause of the crisis.

Quite the opposite, this was a function of overregulation. Federal housing regulators pressured Fannie and Freddie and private lenders to reduce underwriting rules during both the Clinton and Bush administrations to boost minority home ownership.

On the prowl for acquisitions, Citi was a huge target for inner-city shakedown groups that block mergers and acquisitions by complaining to the Fed that banks had poor minority lending records under the Community Reinvestment Act, or CRA.

Acorn first targeted Citibank in 1992 when it accused the lender of discrimination in a rowdy protest at its New York headquarters.

Jesse Jackson fired up the Acorn thugs by telling them to "rob banks" like Jesse James. After their threatening sit-ins, Citi agreed to make more loans to marginally qualified black applicants.

Two years later, a young civil-rights lawyer by the name of Barack Obama shook down Citibank on behalf of alleged victims of racist lending rounded up by Acorn and National People's Action in a class-action lawsuit against the bank. Citi paid them off in a settlement.

'To some extent what we saw in the 2007-08 crash was the result of the throwing off of Glass-Steagall," Parsons said, referring to the 1999 repeal of the banking law that separated banks from investment banks and insurers.

Parsons made the remarks last week following a restive annual shareholder meeting of the bank.

The Glass-Steagall excuse has been thoroughly litigated and discredited. It's another red herring to take a confused public off the scent of the real culprit: overregulation of the mortgage industry. Of course, that's the last thing community organizers crashing the annual meetings of regulated banks want to hear.

There's no evidence any bank, including Citibank, got into trouble because of a securities or insurance affiliate. The banks that suffered subprime losses were engaged in activities — namely, mortgage lending — that were always permitted by Glass-Steagall.

And none of them was affiliated at the time with the investment banks that got into trouble — namely, Lehman, Bear Stearns and Merrill Lynch, which overinvested in subprime securities. And they did so after Fannie Mae and Freddie Mac made a huge market for such investments in response to political pressure from HUD to meet affordable housing goals.

Finally, Glass-Steagall deregulation had nothing to do with the gutting of traditional mortgage underwriting standards — the core cause of the crisis.

Quite the opposite, this was a function of overregulation. Federal housing regulators pressured Fannie and Freddie and private lenders to reduce underwriting rules during both the Clinton and Bush administrations to boost minority home ownership.

On the prowl for acquisitions, Citi was a huge target for inner-city shakedown groups that block mergers and acquisitions by complaining to the Fed that banks had poor minority lending records under the Community Reinvestment Act, or CRA.

Acorn first targeted Citibank in 1992 when it accused the lender of discrimination in a rowdy protest at its New York headquarters.

Jesse Jackson fired up the Acorn thugs by telling them to "rob banks" like Jesse James. After their threatening sit-ins, Citi agreed to make more loans to marginally qualified black applicants.

Two years later, a young civil-rights lawyer by the name of Barack Obama shook down Citibank on behalf of alleged victims of racist lending rounded up by Acorn and National People's Action in a class-action lawsuit against the bank. Citi paid them off in a settlement.

In 1998, when it applied to merge with Travelers Group, Citi bought off CRA pressure groups by pledging $115 billion in subprime loan commitments.

In 2002, when it sought to acquire California Federal Bank, it made another $120 billion subprime peace offering to CRA groups.

Former Treasury Secretary Robert Rubin, a big CRA booster, pushed Citi even deeper into risky multicultural lending when he went to work there.

Citigroup CEO Sanford Weill became a supporter of Jackson and even co-chaired his "Wall Street Project" shakedown operation. He had the bank pump a whopping $750,000 into Jackson's Rainbow/PUSH Coalition.

Citi later gave Acorn Housing almost $400,000 in donations — and even set up its own mortgage brokerage unit with Acorn. The unholy partnership provided mortgages to more than 900 undocumented Latino immigrants nationwide in the years leading up to the subprime bust.

Corporate do-goodism got the best of Citigroup in 2007, when it bought subprime operator Ameriquest, in part to impress CRA extortionists. The move was suicidal, if politically correct.

By 2009, when Parsons took over, Citi required $45 billion in taxpayer funds to bail it out of its subprime mess. This marked the sixth time in 20 years that Citi had to be bailed out by taxpayers. So Citi's foray into risky lending predated its 1998 merger with Travelers.

Clearly, something else was behind its strategy to take on more risk. And that something was the CRA. Parsons apparently hasn't had time to bone up on the company's history.

See Also

Leadership: Among the world's gamier states, there seems to be a new status quo: Kill your opponent. The murder of Boris Nemtsov is the latest such barbarism. It all suggests a void from the U.S. as leader of the free world.The brazen broad-daylight assassination of Nemtsov, a former Russian vice ...

Economy: In his weekly address, President Obama railed against Wall Street for giving "bad advice" that costs American families billions a year. OK, but what about his bad policies that have cost them far more?The president used his precious radio time to lash out at financial advisers for mistakes ...

Cities: The problem with socialism, Margaret Thatcher once noted, is you eventually run out of other people's money. In progressive Chicago, that's hit home as Moody's has cut its credit rating to two grades above "junk."Chicago's finances are staggering under the weight of an unfunded pension ...

Racial Politics: Attorney General Eric Holder complains that the U.S. needs a "lower standard of proof" to enforce civil-rights laws. Standards have already sunk under his "disparate impact" witch hunt. How low is enough? In an exit interview with Politico.com, the outgoing AG asserted, "Some ...

We recently launched the Committee to Unleash American Prosperity with the goal of persuading the presidential hopefuls in both parties to focus on the paramount challenge facing our country: slow growth and stagnant incomes. Faster growth isn't just needed to raise the living standards of ...

Select market data is provided by Interactive Data Corp. Real Time Services. Price and Volume data is delayed 20 minutes unless otherwise noted, is believed accurate but is not warranted or guaranteed by Interactive Data Corp. Real Time Services and is subject to Interactive Data Corp. Real Time Services terms. All times are Eastern United States. *Reflects real-time index prices.